DocuSign began trading on the Nasdaq today at $38 per share. Pricing in at $29 per share on Thursday evening, the stock rose more than 30% during its opening hours to reach a high of $40. The PPS set on Thursday brought the company’s valuation to $4.4 billion (over one-third higher than the $3 billion valuation received following its last private round in 2015) and led the digital signing software company to raise $629.3 million in its initial public offering. With over $500 million total raised since its founding in 2003, DocuSign’s IPO filings show Sigma Partners as the largest shareholder with a 12.9% stake in the company. The company reported that it sold 21.7 million shares on Thursday, a free float of c.14.3%.
Elsewhere in financial news, WeWork provided some insight into its global operation as part of a $500 million corporate bond raise. According to an unnamed informant familiar with the matter, preliminary yields to investors hint at a 7.75% to 8% annual return. The coworking company shared that they have 234 locations across 22 countries, and 220,000 members as of March 1 (up from 44,000 in December 2015) with financial, legal and business services representing the largest industry of members (after “other”). WeWork has c.$5 billion of lease payments due through 2022, plus c.$13.2 billion in 2023.
In software news this week, Google announced major improvements to the web version of Gmail, which officially went live on Wednesday. With the aim of increasing productivity for professionals, the platform’s redesign includes a new “smart reply” functionality and new confidentiality option which can remove the ability to forward, copy and download sensitive messages.
Google also confirmed that they released another broad core algorithm update last week, with the singular aim of improving relevance of search results. Marketers may have experienced a change in rankings, but this is a factor of relevance, not quality, according to Google.
The e-commerce world this week saw BigCommerce announce that they have raised $64 million in a recent round of funding. Led by Goldman Sachs, the investment round involved participation from General Catalyst, GGV Capital and Tenaya Capital. BigCommerce powers e-commerce stores for Sony, Toyota and 60,000 other merchants. Also in e-commerce news, Amazon announced in their first quarter earnings call that they would be increasing Amazon Prime pricing from $99 to $119 per year starting on May 11 of this year. New subscribers will join at $119 starting on May 11, while existing Prime members will be able to renew their membership for $99 until June 16.
New in digital listings this week we have a $308K B2B subscription service in the social media marketing space, with revenues growing at a CMGR of c.11% over the last year, scalable cost structure, a full team ready to transition with the business and low owner involvement.
New in affiliate business listings is a $207K beauty and personal care business with earnings reaching a 14% GMGR over the last year, strong traffic (with over 1.3M sessions in the past year), keyword rankings for c.32,000 keywords and low owner involvement. If you are interested in either of the above businesses, follow the link to request a prospectus.
In events news, Founder Thomas Smale has a busy couple weeks ahead! He will be attending MicroConf 2018 in Las Vegas from April 29 to May 3. If you’re attending MicroConf, make sure to come to the Growth and Starter Networking Mashup we are sponsoring at 8pm in the Havana Room at the Tropicana on May 1st! We’re also hosting a Happy Hour Drinks exclusively for FE clients on May 2nd, so come say hi if you are around. You can also reply to this email to set up a meeting. Following MicroConf, Thomas will be attending SellersSummit from May 3-5 and then Unite Conference from May 7-9.
Lastly, Thomas will be hosting and speaking at LTVConf on May 10-11 at The Grange Hotel, St. Paul’s in London. Tickets are still on sale with code FE INTERNATIONAL for 50% off any tickets and LTVTEAM for an additional 75% off of Team Two Day Ticket.
Continue reading below for more on Docusign’s IPO, WeWork’s bond financing, Gmail’s redesign, and BigCommerce’s most recent round of funding.
- Impressive growth, with revenues growing at a CMGR of c.11% of the trailing 12 months
- Full team of well-trained employees transitioning with the business
- Scalable cost structure
- Low owner involvement
Yearly net profit: $90,500
Asking price: $308,000
- Fast revenue growth, with earnings reaching a 14% compound monthly growth rate over the trailing 12 months
- Popular brand in the $433 billion beauty and personal care industry
- Strong traffic with over 1,300,000 sessions in the past year
- Keyword rankings for c.32,000 keywords
- Low owner involvement
Yearly net profit: $92,200
Asking price: $207,000
In The News…
DocuSign IPOs With Higher than Anticipated PPS
DocuSign debuted their IPO at $29 per share on Thursday evening.
With an initial valuation of $3 billion following their last round of private funding, DocuSign set their PPS to $29, higher than the initially anticipated range of first $24-$26 and then later $26 to $28. The increase in the PPS brings the valuation for the company up to $4.4 billion, about 30% higher than its previous valuation. The most recent round of fundraising in 2015 of $500 million left the company with its initial $3 billion valuation. The most recent fiscal year saw a revenue of $518.5 million, up from $381.5 million last year and $250 million the year before. DocuSign reported losses of $52.3 million, which fell from $115.4 million last year and $122.6 million the year before. The risk factors of the IPO filing cited operating losses as a factor that might prevent them from achieving or sustaining profitability in the future. Main competitors include HelloSign and Adobe Sign, but DocuSign is well placed with major customers like Salesforce, T-Mobile, Morgan Stanley and Bank of America, among others.
Dan Springer is the current CEO of Docusign.
WeWork to Release Bonds
WeWork will be selling $500 million of bonds to investors.
In its inaugural deal, WeWork is suggesting the offer of 7.75-8% to sell bonds to investors, according to someone familiar with the matter. Notes with similar ratings and maturities tend to yield about 5%, according to Bloomberg research. WeWork, which is already backed by SoftBank Group Corp. is one of a recent surge in fast-growing, cash-burning tech companies entering into debt right before interest rates are set to rise. Uber recently took out a loan after posting an annual loss and Netflix borrowed $1.9 billion on Monday of this week. WeWork’s recent needs for cash are part of their strategy to expand across the globe with a $4.4 billion investment from SoftBank. Fueled by this investment, this month alone saw WeWork buy a Hcinese startup and an office complex in London. S&P Global Ratings rated the bond at a B+, while Fitch rated them at BB-.
WeWork was valued at about $20 billion following SoftBank’s investment in August.
Gmail Releases Biggest Redesign Ever
This week, Gmail unveiled the biggest redesign they have ever undertaken.
In an effort to make the web platform more productive for professional use, Gmail has added functions to make the platform more user-friendly. Among the key functionality improvements are the ability to view attachments in an email chain without sifting through the entire conversation, quickly accessing other productivity apps like Google Calendar and Keep, setting “nudges” for emails you haven’t yet replied to, Smart Response to make sending quick replies easier, and a snooze button to remind you about emails later on. New features on the mobile version include high priority notifications to make sure you only get notifications for the most important emails, suggestions for email campaigns/newsletters you might want to unsubscribe from, and warnings for potentially risky emails.
The redesign is live as of this week, with users being able to toggle between traditional and new views through the settings button in Gmail.
BigCommerce Raises Funding to Power E-Commerce Sites
BigCommerce, the growth-stage startup based in Austin, has raised $64 million in a recent round of funding.
The round of funding was led by Goldman Sachs, and included participation from Genral Catalyst, GGV Capital and Tenaya Capital. To date, BigCommerce has raised more than $200 million since its founding in 2009. BigCommerce allows clients to use their template to launch websites equipped with shipping and payments tracking, as well as cross-sell on Amazon, eBay, and Facebook. Their USP touts being able to help online retailers save up to 80% on costs. BigCommerce currently operates fully in the US and Australia, and has its eyes on Europe as an expansion opportunity. Approaching $100 million in annualized revenue, BigCommerce has stated that their target market sector is brands between $1 million and $50 million in revenue. CEO Brent Bellm has stated that he believes this round of funding would be “the last round as a private company.”
Bellm believes BigCommerce is advantageously positioned to do well in the public markets.
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